OREANDA-NEWS. December 08, 2010. The European Fund for Southeast Europe (EFSE) provided a synthetic loan in Moldovan Leu (MDL) worth USD 7 million to ProCredit Bank in Moldova for on-lending to local very small and small enterprises. The respective agreement was signed between the EFSE and ProCredit Bank in Moldova.

The synthetic local currency loan provided by the EFSE to ProCredit Bank in Moldova will allow the Bank to meet the growing demand for long-term local currency financing to very small and small businesses, which is in short supply in Moldova, and increase further its outreach to entrepreneurs in rural and remote areas. “ProCredit Bank in Moldova is one of EFSE’s leading partners in Moldova and the Fund is pleased to provide through this transaction access to finance for approximately 2,000 Moldovan small and very small businesses which are at the heart of private sector growth in Moldova”, said Dr. Klaus Glaubitt, Chairman of the Board of Directors of EFSE.

He emphasized that by signing the synthetic local currency loan agreement with EFSE, the Bank will be able to expand its portfolio of longer-term loans in Moldovan Leu. As a result, this will enable the Bank to protect not only itself, but also its clients from foreign currency risks, and ultimately from the risk of over-indebtedness. It is EFSE’s second synthetic local currency loan. The loan follows the USD 2.5 million loan equivalent in MDL granted to ProCredit Bank in Moldova as part of a syndication worth USD 10 million arranged by the European Bank for Reconstruction and Development (EBRD) in December 2009. ProCredit Bank in Moldova is a member of the international financial group ProCredit, operating in 21 countries worldwide. The Bank has a wide geographical coverage in Moldova, including 25 representative offices all over the country.

The European Fund for Southeast Europe (EFSE) is aimed at fostering economic development and prosperity in Southeast Europe. It offers long-term funding instruments to local financial institutions for on-lending business loans to micro and small enterprises (MSEs) but also to medium-sized enterprises, as well as housing loans to low-income private households.